Coke Starts Bottling in Northern Vietnam

DUYEN THAI, Vietnam —  Coca-Cola Co. inaugurated its first bottling plant in northern Vietnam on Saturday, the first American factory to open in Vietnam since the United States restored diplomatic relations Aug. 6.

Costumed drummers paraded through the $24-million facility as Cokes sped along a computerized bottling line. The plant, 10 miles south of Hanoi, can bottle 136 million gallons of Coke a year.

Coca-Cola plans to introduce a canning line later this year.

“It is very, very hot,” said Curt Ferguson, regional manager for Coca-Cola Indochina Private Ltd. “I think the Coca-Cola business is going to do very, very well in Hanoi.”

First, the company will have to make inroads in a market already dominated by Pepsi. Coca-Cola was allowed to open a joint venture in Ho Chi Minh City--formerly Saigon, the capital of South Vietnam--only last month.

PepsiCo has had a head start. It launched a high-profile advertising campaign after the end of the U.S. economic embargo in February, 1994, and has operated a joint venture in Ho Chi Minh City for more than a year. Its venture has signed bottling agreements with two firms in northern Vietnam.

Both Coke and Pepsi began bottling this summer in the central city of Da Nang.

Vietnamese have known Coca-Cola since the Vietnam War, when the beverage was supplied to hundreds of thousands of U.S. troops. Coke continued to trickle into postwar Vietnam through third countries during the 19-year U.S. economic embargo.

Today, many of Vietnam’s 72 million people see drinking Coke and Pepsi as a status symbol and don’t mind paying 10% more for the beverages than they would for a Vietnamese cola.